"Brazil is the world's dominant sugar exporter, accounting for roughly 45% of global sugar trade. The decision on how much sugarcane goes to sugar versus ethanol is influenced by fluctuating oil prices."
"The government is considering raising the maximum ethanol blend in flex fuel from 30% to 35%, which would significantly increase the amount of sugarcane diverted to fuel production."
"A trucker strike during the sugarcane harvest could halt the critical transportation process, leading to empty supermarket shelves and fuel shortages, reminiscent of the 2018 strike."
"Judith Ganes, an independent commodities analyst, warns that if high oil prices persist, the majority of the sugarcane harvest will likely be allocated to ethanol rather than sugar."
Brazil, the leading sugar exporter, faces a critical decision as high oil prices make ethanol more profitable than sugar. The government is considering increasing the ethanol blend in flex fuel, which would divert more sugarcane to fuel production. Concurrently, truckers threaten to strike over diesel prices, risking disruptions during the crucial sugarcane harvest period. If the strike occurs, it could severely impact the transportation of sugarcane, leading to a significant shift in production from sugar to ethanol amidst ongoing geopolitical tensions.
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